On Friday evening the Government updated the guidance on its Job Retention Scheme (the “Scheme”). This was in relation to a number of changes set to be made to the Scheme over the coming months, such as the introduction of flexible furloughing, and changes to the Government contributions.
We set out a brief overview of the main changes below:
- From 1 July employers will only be able to claim under the Scheme for employees who have previously been furloughed for at least 3 consecutive weeks taking place any time between 1 March 2020 and 30 June. The last day an employee could have started furlough leave was therefore 10 June. The Scheme is no longer open to be used by employers who have not yet made claims under it
- The number of employees an employer can claim for after 1 July cannot be more than the maximum in any previous claim (again subject to the exception below)
- The only exception to the closure to new entrants and limitation on numbers is where an employee has returned from maternity, shared parental, adoption, paternity or parental bereavement leave after 10 June. Such employees can be placed on furlough leave as long as their employer has already made use of the Scheme in respect of other employees
- 31 July is the last day that claims can be submitted for periods ending on or before 30 June
- Employers cannot claim for periods in July before 1 July
- As previously mentioned, the updates confirm the following changes to the Government contribution under the Scheme:
- from 1 August 2020, employers will be required to cover the costs of employer NIC and pension contributions;
- from 1 September the Government will only reimburse 70% of salary (maximum of £2,187.50), with employers having to top up the remaining 10% (or more depending on what is agreed with an employee);
- from 1 October the Government will only reimburse 60% of salary (maximum of £1,875), with employers having to top up the remaining 20% (or more depending on what is agreed with an employee); and
- on 31 October 2020 the Scheme will end.
- Due to the Scheme changing every month, any claims covering the period from 1 July 2020 onwards must start and end in the same calendar month and each claim must be for a period lasting at least 7 days. There is one exception here and that is where a claim is made for a few days at the beginning or the end of a month. This might be, for example, where staff are paid weekly and a week splits across two months. In this situation an employer would need to make two claims, one in respect of each month
- From 1 July, employers may bring back employees on furlough leave for any amount of time and any shift pattern (“Flexible Furlough”)
- Employers who wish to use Flexible Furlough from 1 July will need to agree this with an employee (or reach collective agreement with a trade union) and keep a new written agreement that confirms the new furlough arrangement. Employees can enter into a Flexible Furlough agreement more than once
- The guidance sets out complex rules for calculating the amount of grant to be claimed for Flexible Furlough.
The full detail of the updates is set out in different parts of the Government’s guidance on the Scheme which can all be accessed here.
If you have any questions about the Scheme, or any other employment related matter, please contact a member of the Employment Department.
